Digital money: New forms and old contradictions

Abstract

The form of money has been highly variable in history and continues to change drastically. New forms regularly appear, and their path to becoming money in a full sense is uncertain. Cryptocurrencies are a novel form of e-money based on distributed ledger technology and steadily growing in use. They are distinct from credit money but their own “moneyness” remains in doubt. This special issue of The Japanese Political Economy offers a political-economy-based analysis of their prospects. It considers deeper issues of validation, costs of use, and persistent speculation. It discusses functioning as unit of account, means of payment and reserve formation, and especially as world money. It also examines important differences between native coins with their own blockchains, Central Bank Digital Currencies, and stablecoins. Finally, the social character of cryptocurrencies is contrasted to community-based money. The jury is still out on whether cryptocurrencies could become money in a full sense, but it is shown that they have made great strides in that direction.